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HMRC internal manual

Inheritance Tax Manual

Foreign settled property: when the settlement was made

The legislation refers to the settlor’s (IHTM16000) domicile (IHTM13000) ‘at the time the settlement was made’. You should proceed on the basis that, for any given item of property (IHTM04030) held in a settlement, the settlement was made when that property was put in the settlement. Refer any case where this view is challenged toTG.


S, when domiciled abroad, creates a settlement of Spanish realty. Later he acquires an UK domicile and then adds some Australian property to the settlement.

The Spanish property is excluded property because of S’s overseas domicile when he settled that property. However, the Australian property is not excluded property as S had an UK domicile when he added that property to the settlement.